Personality Traits and Household Entrepreneurship: Evidence from China

Abstract

ABSTRACT Household entrepreneurship can not only promote the sustainable development of the national economy, but also reduce unemployment. However, the urban-rural dual pattern leads to systematic differences in household entrepreneurship. This heterogeneity complicates the relationship between personality traits and household entrepreneurship. In order to study this complex relationship, this study empirically analyzed the influence of personality traits on entrepreneurial decisions and entrepreneurial returns of urban and rural households. Specifically, this study adopts the well-known “Big Five” personality classification criteria in the literature and constructs Probit, Tobit, and Heckman models based on the data of Chinese Family Panel Studies (CFPS) in 2016 and 2018. The results determine those factors beneficial for entrepreneurship, and the return of entrepreneurship depends upon the optimism, rigorousness, and preciseness of the householder. Additionally, the unrestricted intention of the household’s head is not conducive to entrepreneurship. The relevant departments should thoroughly acknowledge the influence of personality traits on the effectiveness of policies while making relevant policies involving household entrepreneurship.